Are Quality Jobs being Created?

The pessimists have claimed that the US is generating low paying jobs. Nearly every monthly jobs report is followed by what seems to be a canned retort. The media picks up on the story and continues to regenerate it. Earlier in the recovery, the argument made sense. It makes less sense now.

This Great Graphic comes from the NY Federal Reserve. It shows US jobs growth in two periods. From 2010-2013, the US created more jobs with low pay that high wage jobs or middle wage jobs. However, that changed in the 2013-2015 period. Middle paying jobs grew sharply.

Taking the 2010-2015 period as a whole, employment growth was nearly equally distributed. Low wage jobs accounted for 35% of the 10.8 mln jobs created. High wage jobs accounted for a full third of the jobs growth. Middle wage jobs accounts for 32% of the new jobs.

This is not to deny the significance of the disparity of income or wealth in the US. The point is to understand what is happening. The disparity may be a function of educational achievement. Consider that the unemployment rate for people 25-year or older with a Bachelor's degree is 3.0%, after falling to 2.3%, this past April. It peaked in July 2010 at 5.3%.

This suggests a structural shift is taking place, with lower skilled and/or less educated people being replaced by technology and foreign workers. It appears that when a US company builds production facilities offshore, unskilled or low skilled workers compete directly with unskilled and low skilled Americans.

However, hiring foreign skilled workers compliments rather than competes with skilled American workers.

Chancellor of the Exchequer of the United Kingdom from 1992 to 2007. Prime Minister of the UK between 2007 and 2010. Inaugural 'Distinguished Leader in Residence' at New York University. Advisor at World Economic Forum